A CIO Blog with a twist; majority of my peer CIOs talk about the challenges they face with vendors, internal customers, Business folks and when things get through the airwaves, the typical response is "Oh I See". Some of you may disagree with my meanderings and that's okay. It's largely experiential and sometimes a lot of questions

Updated every Monday. Views are personal

Tuesday, June 20, 2017

Mass personalization is dead; welcome to the age of nano segmentation !

Attending this conference around
analytics, marketing and understanding the customer behavior using segmentation
as a discipline, almost all the speakers talked about targeting improvements as
the segment sizes got smaller. Complexity of algorithms and the availability of
hardware resources on the cloud as well as lower cost of acquisition has made
it possible to churn data – a lot more data – than it was possible not too long
ago. Marketing effectiveness is waking up and is moving away from the conventional
world.

Companies that engage customers
directly and those with high volumes of transactions have already begun to
garner benefits from these technologies. Even others with a few degrees of
separation between the brand and the consumer are exploring alternative
strategies and business benefits. Almost every conference also has a mandatory
presentation from a research house. The analyst on stage is expected to shower
thought leadership on the audience; it is a rare occurrence when they actually
make any practical sense.

One such session started with
anecdotes of individual attention to the consumer in the pre-technology days
and predicted the return of individualization in the near term. Given enough
data points, oodles of hardware and highly optimized algorithms around machine
superintelligence (the next level after deep learning according to the
speaker), the engine will be able to segment the large volume of data into
buckets of one, i.e. identify and predict behavior and thus target individuals
and capture wallet share.

It has been an aspiration of
software and solution builders to use technology to predict the future; we have
all seen demand forecasts and revenue predictors with Sales & Operations
Planning, most of which hovered in the 70 percent range with a swing of 10
percent on either side. Definitely better than the binary state of tossing a
coin or 50 percent, these solutions removed error rates when 70 percent was off
target to 70 being on target ! Predictive analytics has had better success than
fortune tellers on accuracy levels.

Artificial intelligence at some
levels is already influencing our behaviors with our every keystroke and click
being recorded by some websites and mobile apps whose terms and conditions we
hardly read and comprehend. Changing privacy policies and updates render our
choices ineffective with every update leaving us exposed and vulnerable. Data
privacy coupled with sieve like security allows the good, the bad and the ugly
equal opportunity to use our digital footprint to coerce and nudge us to buy at
one end and pay up on the other end.

Enterprises mired in Paleolithic
technology, archaic mindsets and rusted skills are struggling to deploy and use
such solutions effectively ethically, at times veering away from virtue.
Consultants and technology providers are effectively creating Fear Uncertainty
& Doubt with a promise to bring the Holy Grail to them. Despite their
inability to deliver any credible design or strategy, many large consulting
companies continue to rake in the moolah; CXOs and Promoters are shy of
accepting they have been taken for a ride.

On the sides of the conference a
conversation thread discussed the waste of precious resources and lost time
with one of the premier consulting companies. The angst of the CMO was palpable,
the drinks brought together a few other victims of the same company whose
voluminous reports were gathering dust in their cupboards. Common sorrows bring
feelings of brotherhood that only misery can keep together; they found light at
the end of the tunnel with success that one of them had with a frugal startup
solution.

Nano-segmented Earth’s billions,
does provide individual as the atomic unit who can be observed and experimented
upon to identify triggers that work. As the number of attributes rise,
effectiveness improves, but we have known this for a long time and that
contemporary solutions did not have the ability to provide the actionable
insights in a timeframe that makes the action relevant. Lack of data integrity
and clean data rendered analytics ineffective; algorithms did not know how to
overcome these limitations.

The future of consumerism,
customer behavior, segmentation, marketing, engagement, targeting, influencing,
shadowing, nudging, bombarding, and swamping the hapless customer is closer
than we think. Look around your behavior across life stages, daily innocuous
decisions, and how they are being shaped by invisible forces. As an enterprise
there are too many choices and options; the company with better quality data,
compute and algorithms will be the winner albeit with a short window until
competition catches up.